Activeworlds Inc. provides software products and online services that permit users to enter, move about and interact with others in a computer generated, three-dimensional virtual environment using the Internet. The market for three-dimensional interactive Internet technologies is growing due to both an increasing demand for interpersonal interaction between Internet users and an expanding interest in Internet-based applications. Active Worlds’ robust architecture, ease of use, speed, reliability and scalability have attracted users worldwide. We believe that three-dimensional Internet applications provide enhanced richness that would be of interest to users developing Internet-based advertising, distance learning, training, entertainment, e-commerce, chat and other online activities.